Why Is XRP Price Down Today?

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The price of Ripple’s XRP has erased all gains accumulated over the past two weeks, triggering concern among traders and investors. A combination of macroeconomic uncertainty, shifting market sentiment, and internal developments at Ripple has contributed to the recent downturn. In this analysis, we’ll explore the key factors behind today’s XRP price drop, technical indicators signaling further volatility, and what investors should watch next.

Key Factors Behind the XRP Price Drop

SEC Meeting Cancellation Sparks Uncertainty

One of the most anticipated events in the crypto calendar was a closed-door meeting between Ripple and the U.S. Securities and Exchange Commission (SEC) scheduled for August 1. Market participants had hoped this meeting would signal progress toward resolving the long-standing legal battle over whether XRP qualifies as a security.

However, the meeting was unexpectedly canceled. Neither Ripple nor the SEC provided a clear explanation, fueling speculation and anxiety across the community. Legal clarity has been a major catalyst for XRP price movements in the past, and any delay in resolution tends to weaken investor confidence.

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Falling Odds of a September Rate Cut

Broader market sentiment has also turned bearish due to declining expectations of a Federal Reserve interest rate cut in September 2025. According to CME Group data as of August 2, the probability of a 25-basis-point rate cut dropped to 71.50%, down from 88.2% just one week earlier.

Fed Chair Jerome Powell’s July 31 press conference emphasized that any dovish policy shift hinges on continued cooling of inflation. With inflation data remaining sticky, traders have scaled back their rate cut bets—leading to risk-off behavior across financial markets, including cryptocurrencies.

Since Powell’s remarks, XRP has lost as much as 15.35%, reflecting how closely crypto assets are tied to macroeconomic expectations. Lower rate cut odds strengthen the U.S. dollar and reduce appetite for riskier assets like digital tokens.

Ripple’s Custody Releases Add Selling Pressure

Another immediate factor contributing to XRP’s decline is the recent movement of large XRP volumes from Ripple’s locked custody wallets. Over the past 24 hours, Whale Alert detected multiple transactions involving over 1 billion XRP being transferred in and out of Ripple-controlled addresses.

As of August 2, 500 million XRP were released in two batches from escrow accounts. While such releases are part of Ripple’s regular supply management strategy, they increase circulating supply in the short term. If market demand doesn’t absorb this influx, downward price pressure often follows.

That said, historical patterns suggest Ripple may relock a significant portion of these newly released tokens. In June, for example, the company relocked 800 million XRP after selling only around 300 million (worth approximately $182 million at the time). This practice helps mitigate long-term selling pressure and shows responsible tokenomics management.

Still, short-term traders often react negatively to large wallet movements, regardless of intent—leading to panic-driven sell-offs.

Technical Analysis: Bearish Divergence Signals Caution

XRP’s recent price action shows a classic bearish divergence on the daily chart—a warning sign for traders.

This occurs when price reaches a higher high, but momentum indicators like the Relative Strength Index (RSI) form a lower high. In this case, XRP hit a local peak near $0.658 on July 31, while the RSI peaked at 65.48—lower than previous momentum highs—indicating weakening bullish strength.

Such divergences often precede corrections because they reflect diminishing buying momentum despite rising prices. Increased daily trading volume during the pullback further confirms strong participation from sellers.

Key Support and Resistance Levels to Watch

As of August 2, XRP is testing a critical support level at the 0.5 Fibonacci retracement zone, around $0.571**. A successful bounce here could open the path toward the next resistance at **$0.607, aligned with the 0.618 Fib level.

Conversely, if selling pressure continues and $0.571** breaks, the next major support lies near **$0.54, where both the 50-day EMA (red wave) and 200-day EMA (blue wave) converge. This zone also aligns with the 0.382 Fibonacci retracement level, making it a high-probability area for potential stabilization—if fundamentals don’t worsen.

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Frequently Asked Questions (FAQ)

Why did XRP drop today?

XRP declined due to a mix of factors: the cancellation of a key SEC-Ripple meeting, reduced odds of a Fed rate cut in September 2025, large escrow releases increasing supply, and bearish technical signals like RSI divergence.

Does Ripple still control a lot of XRP?

Yes. While Ripple releases up to 1 billion XRP monthly from escrow, it often relocks unused portions. As seen in June, 800 million were relocked after partial sales—showing ongoing control over supply circulation.

Will XRP recover soon?

Recovery depends on broader market sentiment and legal developments. If XRP holds above $0.571 support and macro conditions stabilize, a rebound toward $0.60–$0.65 is possible. However, a break below $0.54 could extend losses.

How does the SEC lawsuit affect XRP price?

The lawsuit creates regulatory uncertainty. Positive developments—like settlements or favorable rulings—typically boost price, while delays or setbacks trigger sell-offs. The canceled August 1 meeting added to negative sentiment.

What is bearish divergence in crypto trading?

Bearish divergence happens when price makes higher highs but momentum (e.g., RSI) makes lower highs—signaling weakening upward force and likely reversal or correction.

Can I buy XRP before a rate cut?

Many investors buy crypto ahead of expected rate cuts, as lower interest rates tend to boost risk assets. However, timing based on Fed policy carries risk—always combine macro analysis with technical and on-chain data.

Final Outlook: Volatility Ahead, But Long-Term Potential Remains

While XRP is facing short-term headwinds—from regulatory delays to unfavorable macro trends—the fundamentals of Ripple’s network usage and cross-border payment solutions remain strong. The company continues expanding partnerships globally, and on-chain activity suggests steady utility demand.

For traders, monitoring key technical levels like $0.571 and $0.54 will be crucial in determining near-term direction. For long-term holders, dips may present strategic entry points—especially if legal clarity improves or macro conditions turn favorable in late 2025.

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Regardless of short-term fluctuations, understanding the interplay between regulation, supply dynamics, and technical indicators is essential for navigating XRP’s evolving landscape. As always, conduct thorough research and consider risk management before making investment decisions.